Sunday, June 2, 2019

Law and Othèr

As a 14-year old student, Newton’s Third Law of Motion \For every action, there is an equal and opposite reaction/ represented a higher gear shift for an impressionable if fledgling scientist. Much later, I discovered that many non-scientists were vaguely familiar with this law, seemingly appropriated into general lexicon.

At university, I was awestruck by Heisenberg’s Uncertainty Principle \The more precisely the position of a quantum particle is determined, the less precisely its momentum can be known, and vice versa/. But unlike Isaac Newton’s deterministic world, the field of quantum mechanics is highly probabilistic, and so fuzzy as to preclude whimsical allusion.

As a third-tier staff analyst enthralled by owning a personal computer, I stumbled upon Moore’s Law \The processor speed, or the number of transistors in an integrated circuit, will double every two years/. In those days, new computer models were launched in virtual lockstep with ever more powerful microprocessors, based on Gordon Moore’s groundbreaking prediction. Though unrelated, I also recall the first time I encountered Pareto’s Law \For many events, roughly 80% of the effects come from 20% of the causes/. 

As an engineer turned management consultant, it struck me that the rigorous characterisation of a scientific law, requiring reproducible data or mathematical proof, was blithely being usurped by the business community. From the perspective of science purists, Moore’s Law is highly contrived. A careful analysis of Werner Heisenberg’s Principle perhaps confirms why more cautious professionals chose to express Pareto’s Law as Pareto Principle or the 80/20 Rule.  

The 80/20 Rule (Pareto) is attributed to the late 19th century Italian economist, Vilfredo Pareto, who unearthed the fact that 80% of his country’s land was owned by 20% of its citizens. Since then, Pareto has been applied in a broad cross-section of human endeavours - from economics, engineering, computing, healthcare to sports. In reality, the percentages can shapeshift, with the critical variables ranging from 10% to 30%; that is, 90/10 to 70/30.

Incidentally, the most quoted version of Pareto states that 80% of sales come from 20% of clients. Another ascribes 80% of a company’s total production to 20% of its workforce. As a basic principle, Pareto advises managers to focus their time on 20% of what truly matters, and underscores why Pareto is sometimes called the principle of the vital few and trivial many.

Within the derogatory trivial many phrase lies the challenge and anticipated pushback at what seems like a confirmation bias for hierarchical structures. There are those who would clamour for an equitable or balanced 50/50 outcome, in principle. The response to that ideology is simple. Societies where equality of outcome has been pursued by fiat have usually witnessed egregious tyranny. By contrast, a free but imperfect system strives to create a level-playing field and equal opportunity for all. However, with all the best intentions in the world, merit-based systems are just as susceptible to corruption and power play.

In essence, Pareto’s prescient observation provided ample evidence that no society or human organisation is infallible, or remotely utopian. Notwithstanding, if a nation’s goal is to achieve long-term prosperity, it is essential that the most competent people or the vital few are motivated to produce maximally, while the trivial many are unimpeded in realising their full potential. Unfortunately, the price for such pragmatism is an inevitable pyramid structure.

While a physical law imposes universal order on natural phenomena, Pareto’s 80/20 Rule falls short of that standard. Yet, the global impact of the othèr, lesser paradigm is just as consequential.

If you liked this post, enter your e-mail address above to subscribe. It's that simple.


Please Leave a Comment